In a nutshell, Check 21 (the Check Clearing for the 21st Century Act) allows banks to replace original paper checks with "substitute checks" that are made from digital copies of the originals.

Check 21 was created to reduce the time, risks, and costs associated with paper check processing. Currently checks travel on trains, planes, and automobiles during the clearing process. When Check 21 becomes effective, banks will send digital images of checks electronically eliminating the need to physically transport paper checks between banks. Check 21 will also reduce uncontrollable transportation delays that can be caused by weather or natural disasters.

Check 21 will create a more efficient check processing system without changing the way consumers write checks. It simply requires banks and customers to accept paper copies of their original checks called "substitute checks".

A substitute check is a paper copy of the digital image of your check-both front and back, with all endorsements- and is about the size of a business check. Check 21 legislation sets standards for quality and allows for substitute checks to be legal copies of the originals. All banks must accept the substitute check as they would the original document.

If you receive your cancelled checks with your statement, you may receive a mix of substitute checks and original checks. If you don't receive your cancelled checks, you will not notice a change in the check images. Because check processing will be faster with the implementation of Check 21, funds may be deducted from your account sooner than in today's system. You should be aware that there will be less "float time," particularly for out-of-town checks. As always, make sure you have enough money in your account before writing a check.

Check 21 does not mandate electronic processing of digital check images. It simply makes it possible. For banks that choose to process checks manually, a substitute check will be made from the image, which will be processed as if it were the original.

Check 21 was signed into law October 28, 2003, and became effective October 28, 2004.

Yes, everyone must accept substitute checks beginning October 28, 2004. In fact, digital images of cancelled checks have been accepted as proof of payment by the courts and the IRS for decades.